Mr. Robert Farrell reports

KALYTERA ANNOUNCES ISSUANCE OF SECOND PATENT COVERING THE USE OF CBD IN GRAFT VERSUS HOST DISEASE

The U.S. Patent and Trademark Office (USPTO) has issued to Kalytera Therapeutics Inc. U.S. patent No. 9,956,182 with claims covering the use of cannabidiol (CBD) for the prevention and treatment of acute and chronic forms of graft-versus-host disease (GVHD). Kalytera has exclusive worldwide rights to this issued patent through an exclusive licence agreement with MOR Research Applications Ltd. of Israel.

GVHD is a multisystem disorder that is a life-threatening complication commonly occurring after bone marrow transplant procedures. GVHD occurs when the transplanted donor cells attack the patient's organs, including the skin, gastrointestinal tract, liver, lungs and eyes. GVHD is associated with acute and chronic illness, infections, disability, reduced quality of life and death.

In November, 2017, Kalytera announced that it had received notice from the USPTO that the application for this patent would be allowed. The issuance of this patent by the USPTO is the final step in the patent application process and provides patent coverage to Kalytera for the use of CBD in the prevention and treatment of acute and chronic forms of GVHD through May, 2034, under the exclusive licence agreement with Mor.

This is the second patent covering the use of CBD in GVHD that Kalytera has received in the past three weeks. On April 19, 2018, Kalytera announced that the USPTO had issued U.S. patent No. 9,889,100 B2 with claims covering the use of CBD for the treatment of severe and refractory GVHD.

"We are delighted by the issuance of this second patent for CBD in the treatment and prevention of GVHD," said Robert Farrell, president and chief executive officer of Kalytera. "We now have very strong intellectual property protection that will provide us with market exclusivity for the use of CBD in GVHD through early 2034."

Mr. Farrell went on to state: "Our program for prevention of GVHD is in phase 2 clinical testing, and, later this year, we will begin a phase 3 pivotal registration study in the treatment of GVHD. With our GVHD program advancing into the final phases of clinical testing, we will now begin seeking regional partners for commercialization of this product outside of North America. Such partnering agreements can provide non-dilutive sources of funding through licensing, milestone and royalty revenue opportunities."

The commercial opportunity for Kalytera's CBD product in the treatment and prevention of GVHD is large. According to the January, 2018, market forecast report by DelveInsight Perspective, the potential size of the market for a successful product in the seven major jurisdictions (the United States, Germany, France, Italy, Spain, the United Kingdom and Japan) is estimated to be more than $408-million (U.S.) in 2018 and could grow to approximately $1.3-billion (U.S.) by 2027.

Kalytera acquired its program in the prevention and treatment of GVHD in February, 2017, through the acquisition of Talent Biotechs Ltd. of Israel. Under its agreement with the former Talent Biotechs shareholders, Kalytera is obligated to make additional contingent payments to the former Talent Biotechs shareholders upon the achievement of certain milestones, including upon the issuance of patents by the USPTO. Upon the earlier issuance of U.S. patent No. 9,889,100 B2 by the USPTO, Kalytera became obligated to make a payment to the former Talent Biotechs shareholders of 2,883,535 common shares and a cash payment of $2-million (U.S.). With the issuance of U.S. patent No. 9,956,182 by the USPTO, Kalytera is now obligated to make an additional cash payment to the former Talent Biotechs shareholders of $2-million (U.S.).

About Kalytera Therapeutics Inc.

Kalytera is pioneering the development of a next generation of cannabinoid therapeutics. Through its proven leadership, drug development expertise and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of novel cannabinoid medicines for a range of important unmet medical needs, with an initial focus on graft-versus-host disease and the treatment of acute and chronic pain.

We seek Safe Harbor.